$150,000,000
Delta Financial Corporation
9 1/2% Senior Notes due 2004
UNDERWRITING AGREEMENT
----------------------
July 18, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Delta Financial Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell $150,000,000 principal amount of its 9 1/2% Senior
Notes due 2004 (the "Notes") to the several underwriters named in Schedule I
hereto (the "Underwriters"). The Notes are to be fully and unconditionally
guaranteed (the "Guarantees," and together with the Notes, the "Securities"), on
a joint and several basis, by each subsidiary of the Company set forth on
Schedule II hereto (the "Guarantors," and together with the Company, the
"Registrants"). The Securities are to be issued pursuant to the provisions of an
Indenture to be dated as of July 23, 1997 (the "Indenture") among the
Registrants and The Bank of New York, as Trustee (the "Trustee").
SECTION 1. Registration Statement and Prospectus. The Registrants have
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 (Registration
No. 333-28643), including a prospectus, relating to the Securities. The
registration statement, as amended at the time it became effective, including
the information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Act, is hereinafter
referred to as the "Registration Statement;" and the prospectus in the form
first used to confirm sales of Securities is hereinafter referred to as the
"Prospectus." If the Registrants have filed or are required pursuant to the
terms hereof to file a registration statement pursuant to Rule 462(b) under the
Act registering additional 9 1/2% Senior Notes due 2004 (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
SECTION 2. Agreements to Sell and Purchase.
(a) On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Registrants agree
to issue and sell, and each Underwriter agrees, severally and not jointly, to
purchase from the Registrants the principal amount of Securities set forth
opposite the name of such Underwriter in Schedule I hereto at a price equal to
96.767% of the principal amount thereof (the "Purchase Price").
(b) The Registrants confirm their engagement of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
("SBI"), one of the Underwriters, as, and SBI hereby confirms its agreement with
the Registrants to render services as, a "qualified independent underwriter,"
within the meaning of Section (b)(15) of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD") with respect to
the offering and sale of the Securities. SBI, solely in its capacity as
qualified independent underwriter and not otherwise, is referred to herein as
the "QIU." The Registrants agree that the yield at which the Securities are sold
to the public will be no lower than the yield recommended by SBI acting as QIU.
SECTION 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the execution and delivery of this
Agreement as in your judgment is advisable and ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Securities shall be made at 9:00 A.M., New York City time, on
July 23, 1997 (the "Closing Date") at such place as you shall designate. The
Closing Date and the location of delivery of and payment for the Securitie may
be varied by agreement between you and the Registrants.
Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date. Such certificates shall be made
available to you for inspection not later than 9:30 A.M., New York City time, on
the business day prior to the Closing Date. Certificates in definitive form
evidencing the Securities will be delivered to you on the Closing Date with any
transfer taxes thereon duly paid by the Registrants, for the respective accounts
of the several Underwriters, against payment to the Company of the Purchase
Price therefor by wire transfer of Federal or other funds immediately available
in New York City.
SECTION 5. Agreements of the Registrants. The Registrants, jointly and
severally, agree with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, (iv) if the Registrants are
required to file a Rule 462(b) Registration Statement after the effectiveness of
this Agreement, when the Rule 462(b) Registration Statement has become effective
and (v) of the happening of any event during the period referred to in Section
5(d) below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
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therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Registrants will
use their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you, without charge, four signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration Statement
as so filed and of each amendment to it, without exhibits, as you may reasonably
request.
(c) To prepare the Prospectus in a form approved by you and to file the
Prospectus in such form with the Commission within the applicable period
specified in Rule 424(b) under the Act; not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the Securities by
you, and to use its best efforts to cause any such amendment to the Registration
Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur as a result of which, in the opinion of counsel for the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify, such
number of copies thereof as such Underwriter or dealers may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such jurisdictions
as you may request, to continue such qualification in effect so long as required
for distribution of the Securities and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification.
(g) To mail and make generally available to its security holders as
soon as practicable an earnings statement that shall satisfy the provisions of
Section 11(a) of the Act, and to advise you in writing when such statement has
been so made available.
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(h) So long as the Securities are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Securities a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(i) So long as the Securities are outstanding, to furnish to you as
soon as available a reasonable number of copies of all reports or other
communications furnished to its security holders or furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of any Registrant is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Registrants' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Registrants' counsel and the Registrants' accountants in connection with the
registration and delivery of the Securities under the Act and all other fees or
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing prior to or during the period specified in Section 5(d),
including the mailing and delivering of copies thereof to the Underwriters and
dealers in the quantities specified herein, (ii) all costs and expenses related
to the transfer and delivery of the Securities to the Underwriters, including
any transfer or other taxes payable thereon, (iii) all costs of printing or
producing all agreements or documents in connection with the offering, purchase,
sale or delivery of the Securities (other than this Agreement, the Indenture and
the Securities), (iv) all expenses in connection with the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and reasonable disbursements of
counsel for the Underwriters in connection with the review and clearance of the
offering of the Securities by the NASD, (vi) the cost of printing certificates
representing the Securities, (vii) the costs and charges of any transfer agent,
registrar and/or depositary (including the Depository Trust Company), (viii) any
fees charged by rating agencies for the rating of the Securities and (ix) and
all other reasonable costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section.
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Registrants or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Registrants substantially similar to the Securities (other than the
Securities), without the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation.
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(l) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Registrants prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Securities.
(m) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
SECTION 6. Representations and Warranties of the Registrants. The
Registrants, jointly and severally, represent and warrant to each Underwriter
that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Registrants after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the Registrants' knowledge, no proceedings for such purpose are pending before
or threatened by the Commission.
(b)(i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Registrants after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Registrants after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Registrants are required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become effective
(A) will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (B) will comply in all material respects with the
Act, (iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein, and (v) each
preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Act, complied when so filed in all material respects with the Act, and did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(c) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the
5
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole. The Company has no subsidiaries other
than the Guarantors.
(d) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
(e) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, free and clear of
any security interest, mortgage, pledge, claim, lien, encumbrance or adverse
interest of any nature (each a "Lien"). Except as otherwise set forth in the
Registration Statement or the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or Liens related to or entitling any person, other than the
Company, to purchase or otherwise to acquire any shares of the capital stock of,
or other ownership interest in, any subsidiary of the Company.
(f) The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and has been duly authorized
and, when executed and delivered by the Registrants, will be a valid and binding
agreement of each of the Registrants, enforceable in accordance with their terms
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (B) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(g) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance with their
terms except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (B) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(h) The Securities and the Indenture conform as to legal matters to the
description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Registrants, compliance by the Registrants
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not require any consent,
6
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states) and will not conflict with or constitute
a breach of any of the terms or provisions of, or a default under, the charter
or by-laws of the Company or any of its subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, or violate or conflict with
any applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over the Company,
any of its subsidiaries or their respective property.
(k) There are no legal or governmental proceedings pending or, to the
Registrants' knowledge, threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated thereunder, or any federal or state usury or consumer
credit laws, except for such violations which, singly or in the aggregate, would
not have a material adverse effect on the business, prospects, financial
condition or results of operation of the Company and its subsidiaries, taken as
a whole.
(m) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(n) This Agreement has been duly authorized, executed and delivered by
each of the Registrants.
(o) KPMG Peat Marwick LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.
(p) The consolidated financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
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(q) None of the Registrants is and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, none of the Registrants will be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(r) There are no contracts, agreements or understandings between any
Registrants and any person granting such person the right to require the
Registrants to file a registration statement under the Act with respect to any
securities of the Registrants or to require the Registrants to include such
securities with the Securities registered pursuant to the Registration
Statement.
(s) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(t) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(u) All tax returns required to be filed by the Company or any of its
subsidiaries in any jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due or claimed to be
due from such entities have been paid, other than those being contested in good
faith and for which adequate reserves have been provided or those currently
payable without penalty or interest.
(v) The Company and each of its subsidiaries maintain insurance
(subject to customary deductibles and retentions) with responsible insurance
companies in such amounts and against such risks as is customarily carried by
responsible companies engaged in similar businesses.
(w) The Guarantees have been duly authorized by each of the Guarantors
and, when executed and authenticated in accordance with the provisions of the
Indenture, will conform in all material respects to the description thereof in
the Prospectus, will be valid and binding obligations of each of the Guarantors,
will be entitled to the benefits of the Indenture and enforceable in accordance
with their terms except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(B) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
SECTION 7. Indemnification. (a) Each Registrant, jointly and severally,
agrees to indemnify and hold harmless each Underwriter, its directors, its
officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with defending or investigating
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), the
8
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished in writing to the Company by such Underwriter through you
expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Registrants, their respective directors, officers who sign
the Registration Statement and any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Registrants to such Underwriter but
only to the extent that an untrue statement or omission or alleged omission was
made in reliance upon or in conformity with written information furnished to the
Registrants by such Underwriter for use in the Registration Statement.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing, which authorization shall not be unreasonably withheld,
by the indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ Securities Corporation, in the case of parties indemnified pursuant
to Section 7(a), and by the Company, in the case of parties indemnified pursuant
to Section 7(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than ten business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
9
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Registrants on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause 7(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 7(d)(i) above
but also the relative fault of the Registrants and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Registrants and
the Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Securities, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Registrants and the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Registrants or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Registrants and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such indemnified party in connection with investigating or
defending any matter that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective principal amount of Securities purchased by each of the Underwriters
hereunder and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
10
SECTION 8. Indemnification of Qualified Independent Underwriter.
(a) Each of the Registrants, jointly and severally, agrees to indemnify
and hold harmless the QIU and each person, if any, who controls the QIU within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities or judgments (including
without limiting the foregoing the reasonable legal and other expenses including
reasonable costs of investigation incurred in connection with any action, suit
or proceeding or any claim asserted) arising out of: (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities, judgments or
expenses are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the QIU furnished in
writing to the Registrants by the QIU expressly for use therein; or (ii) the QIU
having acted, failed to act or alleged to have failed to act in its capacity as
the "qualified independent underwriter" with respect to the offer and sale of
the Notes; provided, however, that to the extent that any such loss, claim,
damage, liability or judgment referred to in the foregoing clause (ii) is found
in a final judgment by a court of competent jurisdiction, not subject to further
appeal, to have resulted from the willful misconduct or gross negligence of the
QIU, the Registrants will not be liable to that extent; provided, however, that
the foregoing indemnity with respect to any untrue statements contained in or
omission from a preliminary prospectus shall not inure to the benefit of the QIU
(or any person controlling such QIU) to the extent that the person asserting any
such loss, liability, claim, damage or expense purchased any of the Securities
which are subject thereof if such person was not sent or given a copy of the
Prospectus at or prior to the written confirmation of the sale of such
Securities to such person and the untrue statement contained in or omission from
such preliminary prospectus was corrected in the Prospectus. This indemnity
agreement will be in addition to any liability which the Registrants may
otherwise have to the persons referred to above in Section 7 and this Section
8(a).
(b) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against the QIU or any
person controlling the QIU (for purposes of this Section 8(b), the QIU and/or
such controlling person, as appropriate, shall hereinafter be referred to as the
"Indemnified"), based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Registrants shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only
with reference to information relating to the QIU furnished to the Registrants
in writing by the QIU expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary prospectus
or (ii) the QIU having acted, failed to act or alleged to have failed to act in
its capacity as the "qualified independent underwriter" with respect to the
offer and sale of the Securities, and with respect to which indemnity may be
sought against the Registrants (each of the Registrants, as appropriate, for
purposes of this Section 8(b), are hereinafter referred to as the
"Indemnifier"), the QIU shall promptly notify the Registrants in writing and the
Registrants shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified to represent the Indemnified
and any others the Indemnifier may designate and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such action or
proceeding, the Indemnified shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of the Indemnified
unless (i) the Indemnifier and the Indemnified shall have mutually agreed to the
retention of such counsel, (ii) the Indemnifier shall have failed to assume the
defense and employ counsel or (iii) the named parties to
11
any such proceeding (including any impleaded parties) include both an
Indemnifier and the Indemnified and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
among them. It is understood that the Indemnifier shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm (in addition to
local counsel) for the QIU and all persons, if any, who control the QIU within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act
and that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the QIU and such control persons of the
QIU, such firm shall be designated in writing by the QIU. The Indemnifier shall
not be liable for any settlement of any proceeding effected without its written
consent; but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifier agrees to indemnify the Indemnified from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the Indemnifier and the
Indemnified shall have requested the Indemnifier to reimburse the Indemnified
for such fees and expenses of counsel as incurred, the Indemnifier agrees that
it shall be liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business days after
the receipt by the Indemnifier of the aforesaid request and (ii) such
Indemnifier shall have failed to reimburse the Indemnified in accordance with
such request for reimbursement prior to the date of such settlement. No
Indemnifier shall, without the prior written consent of the Indemnified, effect
any settlement of any pending or threatened proceeding in respect of which the
Indemnified is or could have been a party and indemnity could have been sought
hereunder by the Indemnified, unless such settlement includes an unconditional
release of the Indemnified from all liability on claims that are the subject
matter of such proceeding.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities, judgments and expenses in such proportion as is
appropriate to reflect the relative fault of the Registrants on the one hand and
the QIU on the other hand in connection with the statements or omissions or
actions or failure to act which resulted in such losses, claims, damages,
liabilities, judgments or expenses, as well as any other relevant equitable
considerations. The relative fault of the Registrants on the one hand and the
QIU on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Registrants on the one hand or the QIU on the other hand and the party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission and whether the QIU's recommendation, advice
or services as QIU pursuant to Section 2(b) hereof involved any willful
misconduct or gross negligence on the part of the QIU.
(d) The Registrants and the QIU agree that it would not be just and
equitable if contribution pursuant to Section 8(a) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
12
SECTION 9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Registrants contained
in this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) If the Registrants are required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) On or after the date hereof there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating of any of the Registrants'
outstanding indebtedness (including, without limitation, the placing of any
securities on negative or developing watch or negative or developing outlook) by
any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act.
(d) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Securities; and
no injunction, restraining order or order of any nature by a federal or state
court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Securities.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(e)(i),
9(e)(ii) or 9(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, in their capacities as
the President and Chief Executive Officer and Chief Financial Officer of the
Company, respectively, confirming the matters set forth in Sections 9(a), 9(b),
9(c), 9(d) and 9(e).
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Stroock & Stroock & ▇▇▇▇▇ LLP, counsel for the Company, to the effect that:
13
(i) each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its business
or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar
rights;
(iv) all of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and, to the best of such
counsel's knowledge after due inquiry, are owned by the Company, free
and clear of any security interest, claim, lien or encumbrance;
(v) the Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and rights of acceleration and
the availability of equitable remedies may be limited by equitable
principles of general applicability;
(vi) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Registrants and is a valid and binding agreement of each of the
Registrants, enforceable in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vii) the Registrants have full corporate power and authority
to enter into this Agreement and consummate the transactions provided
for herein and this Agreement has been duly authorized, executed and
delivered by the Registrants and this Agreement, assuming due
authorization, execution and delivery by each other party hereto, is a
valid and binding agreement of the Registrants, enforceable against the
Registrants in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and rights of acceleration and
the availability of equitable remedies may be limited by equitable
principles of general applicability;
(viii) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge after due inquiry,
no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission;
14
(ix) the statements under the captions "Business-Regulation,"
"Business-Environmental Matters," "Business-Legal Proceedings" and
"Description of the Notes" in the Prospectus and Items 14 and 15 of
Part II of the Registration Statement, insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings, provided that
the opinions as to "Business-Regulation" may be provided by The Law
Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇;
(x) neither the Company nor any of its subsidiaries is in
material violation of its respective charter or by-laws;
(xi) the execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Registrants,
compliance by the Registrants with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby
and thereby will not require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body
or agency (except such as may be required under the securities or Blue
Sky laws of the various states) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its subsidiaries
or any indenture, loan agreement, mortgage, lease, or, to the best of
such counsel's knowledge after due inquiry, other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound, or violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any
of its subsidiaries or their respective property;
(xii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to which
any of their respective property is or could be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
(xiii) to the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its subsidiaries has violated
any Environmental Law or any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or the rules and regulations
promulgated thereunder, except for such violations which, singly or in
the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole;
(xiv) none of the Registrants is and, after giving effect to
the offering and sale of the Notes and the application of the proceeds
thereof as described in the Prospectus, none of the Registrants will
be, an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xv) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings between
the Registrants and any person granting such person the right to
require the Registrants to file a registration statement under the Act
with respect to any
15
securities of the Registrants or to require the Registrants to include
such securities with the Securities registered pursuant to the
Registration Statement;
(xvi) each of the Guarantors has duly authorized the
Guarantees, which, when executed and authenticated in accordance with
the provisions of the Indenture, and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be
valid and binding obligations of each of the Guarantors, enforceable
against each of them in accordance with the terms of the Guarantees
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally and
(b) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability
(regardless of whether such enforceability is considered in a
proceeding at law or in equity);
(xvii) to the best of such counsel's knowledge after due
inquiry, there are no actions, suits or proceedings pending or
threatened against the Company or any subsidiary or any of their
respective properties at law or in equity or before or by any
commission, board, body, authority or agency which are required to be
described in the Prospectus but are not so described;
(xviii) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and other financial data included therein as to which no opinion need
be expressed) comply as to form with the Act; and
(xix) to the best of such counsel's knowledge after due
inquiry, neither the Company nor any subsidiary is in breach of, or in
default under (nor has any event occurred which with notice, lapse of
time or both would constitute a breach of or default under), any
indenture, mortgage (under which the Company or any subsidiary is
mortgagor), trust (under which the Company or any subsidiary is
trustor), lease, bank loan, credit agreement or any other agreement or
instrument to which the Company or any subsidiary is a party or by
which the Company or any subsidiary or their respective properties are
bound or affected or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or any subsidiary, which
breach or default would have a material adverse effect on the business,
properties, assets, operations or condition (financial or otherwise) of
the Company and any subsidiary, taken as a whole.
The opinion of Stroock & Stroock & ▇▇▇▇▇ LLP described in Section 9(g)
above shall be rendered to you at the request of the Company and shall so state
therein.
(h) In addition, in the opinion of Stroock & Stroock & ▇▇▇▇▇ LLP
described in Section 9(g) above, Stroock & Stroock & ▇▇▇▇▇ LLP shall state that
such counsel has no reason to believe that at the time the Registration
Statement became effective or on the date of this Agreement, the Registration
Statement and the prospectus included therein (except for the financial
statements and other financial data as to which such counsel need not express
any belief and except for that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture
Act) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and such counsel has no reason to believe that the
Prospectus, as amended or supplemented, if applicable (except for the financial
statements and other financial data, as aforesaid) contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
16
(i) You shall have received on the Closing Date an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, as to the
matters referred to in Sections 9(g)(v), 9(g)(vi), 9(g)(vii), 9(g)(ix) (but only
with respect to the statements under the caption "Description of Notes" and
"Underwriting") and 9(h).
In giving such opinions with respect to the matters covered by Section
9(h), ▇▇▇▇▇▇▇ & Stroock & ▇▇▇▇▇ LLP and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified.
(j) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(k) The Registrants shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Registrants at or prior to the
Closing Date.
SECTION 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities on any such
exchange or the Nasdaq National Market, (iii) the suspension of trading of any
securities of the Registrants on any exchange or in the over-the-counter market,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects, or will
materially and adversely affect, the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, (v)
the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date by all Underwriters,
each non-defaulting Underwriter shall be obligated severally, in the proportion
which the principal amount of Securities set forth opposite its name
17
in Schedule I bears to the aggregate principal amount of Securities which all
the non-defaulting Underwriters, as the case may be, have agreed to purchase, or
in such other proportion as you may specify, to purchase the Securities which
such defaulting Underwriter or Underwriters, as the case may be, agreed but
failed or refused to purchase on such date; provided that in no event shall the
aggregate principal amount of Securities which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such principal amount of Securities without
the written consent of such Underwriter. If on the Closing Date any Underwriter
or Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased
by all Underwriters and arrangements satisfactory to you and the Registrants for
purchase of such Securities are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter and the Registrants. In any such case which does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
SECTION 11. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to ▇▇▇▇
▇▇▇▇▇▇, Delta Financial Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and (ii) if to any Underwriter or to you, to you c/▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Registrants and the several Underwriters
set forth in or made pursuant to this Agreement shall remain operative and in
full force and effect, and will survive delivery of and payment for the
Securities, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the officers or directors of
any Underwriter, any person controlling any Underwriter, the Registrants, the
officers or directors of the Registrants or any person controlling the
Registrants, (ii) acceptance of the Securities and payment for them hereunder
and (iii) termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of
the Registrants as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Registrants agree to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Registrants, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Registrants' directors and the Registrants' officers who
sign the Registration Statement and their respective successors and assigns, all
as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include a purchaser of any of the Securities
from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
18
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
19
Please confirm that the foregoing correctly sets forth the agreement
between the Registrants and the several Underwriters.
Very truly yours,
DELTA FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
DELTA FUNDING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
FIDELITY MORTGAGE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
FIDELITY MORTGAGE (FLORIDA), INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
DF SPECIAL HOLDINGS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
BY ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
NAME: ▇▇▇▇▇▇▇ ▇▇▇▇▇
TITLE: SENIOR VICE PRESIDENT
SCHEDULE I
----------
Principal Amount of
Securities
Underwriters to be Purchased
---------------- ----------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ $ 90,000,000.00
Securities Corporation
▇▇▇▇▇▇ Brothers Inc. $ 30,000,000.00
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $ 30,000,000.00
---------------------------
$ 150,000,000.00
SCHEDULE II
-----------
Delta Funding Corporation
Fidelity Mortgage, Inc.
Fidelity Mortgage (Florida), Inc.
DF Special Holdings Corporation